What are Loan & Grant Scams?
A loan or grant scam is a fraudulent scheme where scammers pretend to be legitimate lenders or grant providers. They promise access to loans or grants on attractive terms, no matter your credit score or financial situation. The catch? They will ask for an upfront fee, a security deposit, or private personal information. Unfortunately, once they have your money or data, they vanish, and the promised loan or grant never materializes.
How Loan & Grant Scams Scams Operate:
Typically, scammers approach individuals via email, phone calls, or social media, advertising low-interest rates for loans or grants. They often pressure victims to act fast, stating that the "opportunity" is limited or the terms are available for a short time. They may even claim they got your details from a credible source to add legitimacy.
Scammers might ask for personal information like social insurance numbers, credit card numbers, or bank details. Alternatively, they may ask for an upfront fee, often disguised as a processing or insurance fee, before you can receive your loan or grant. This payment may be requested via unconventional methods such as gift cards or Bitcoin.
Prevention: Stay Alert
- Research: Always research any loan or grant company before proceeding with any transaction. Genuine lenders and grant providers will have a verifiable presence online and offline.
- Ask your Bank: Call or go in person to your bank to get advice on whether this loan or grant is legitimate.
- Beware of upfront fees: Legitimate lenders never guarantee a loan or ask for a fee before you apply or before the loan is approved.
- Check for registration: All genuine lenders must be registered in the provinces where they do business. You can check this with your provincial or territorial regulator.
- Avoid high-pressure sales tactics: Legitimate businesses will not pressure you to make immediate decisions.
- Understand payment methods: Be wary if the company asks for payments via wire transfer, gift cards, or digital currency like Bitcoin. These payment methods are difficult to trace and recover once sent.
- Protect your personal information: Do not share personal or financial details unless the company is legitimate.
If You Are a Victim of a Scam:
See our guide on what to do if you are the victim of a scam / fraud.